Rediscovering the Virtues of Consortium Banks: The Corporate Fund Association Project

As the liquidity crisis reached its fever pitch in 2009, twenty-four large corporations from seven countries actively worked on a consortium bank project – particularly efficient in rough weather – aiming at diversifying their funding sources and their ecosystem’s ones. They wished to extend the eligibility to this institution to smaller companies, and have been working to get access to various programs of the European Investment Bank and European Investment Fund. Beside a simple business purpose (granting medium-term credit facilities to its sole shareholders), this bank would rely on original mechanisms preserving its solvency at any circumstances and on an asset-liability management policy matching the duration of its resources and commitments (and vice versa). Asset managers, a leading rating agency and public authorities acknowledged the potential efficiency and resilience of such a business model. With credit at historically low prices, most of the corporate sponsors decided to put the project on hold; yet the current lull should be the most favourable time to set up tools to face the next liquidity crisis.